I have no ill will toward any institution in our country. I do not want to indict anyone or any institution.
But, I do want to make a point. When Congress acts in brinkmanship they dearly don't have a clue what they are doing, except, playing politics.
The Federal Home Loan Banks are government sponsored and supply monies to institutions from taxpayer dollars and whatever monies it raises in transactions such as interest.
The Federal Home Loan Bank (FHLB) System (click here) is a large, complex, and
understudied government-sponsored liquidity facility that currently has
more than $1 trillion in secured loans outstanding, mostly to commercial
banks and thrifts. In this paper, we document the significant role
played by the FHLB System at the onset of the ongoing financial crises
and then provide evidence on the uses of these funds by the System's
bank and thrift members. Next, we identify the trade-offs faced by
member-borrowers when choosing between accessing the FHLB System or the
Federal Reserve's Discount Window during the crisis period. We conclude
by describing the fragmented U.S. lender-of-last-resort framework and
finding that additional clarity about the respective roles of the
various liquidity facilities would be helpful.
The banks required to insure themselves are doing so with government money. Hello?
I don't know about anyone else, but, I am getting a little queasy. To begin, the room is spinning with open banking counters and a choice of where does my money come from next.
When was the last time the banks did a Comprehensive Capital Analysis and Stress Test? (click here)
It would be helpful and reassuring.
Additionally, Congress hasn't got a clue about the financial system in this country or the world. So, they really should not be playing with Debt Ceilings and Budget Defunding.
Additionally, Congress hasn't got a clue about the financial system in this country or the world. So, they really should not be playing with Debt Ceilings and Budget Defunding.
Besides getting $5 Billion from Warren Buffet, BOA also borrows from FHL Banks, as does Citibank and JP Morgan. At any point in time does anyone close a banking window to these institutions to reduce the risk in the system?
Bernanke's QEs aren't and weren't enough? Now, The Fed is stating the drawdown to the latest QE won't occur until March next year? Wow. That is a lot of money. With politicians playing 'chicken' there is no reason for the USA government to lend to anyone else considering our debt.
Don't things seem a hair bit out of control?
By Jody Shenn
Oct 10, 2013 4:22 PM ET
JPMorgan Chase & Co. (JPM), the biggest
U.S. bank, is using cheap funding from government-chartered
institutions to meet new regulations designed to ensure it won’t
need a taxpayer bailout in any future crisis.
The bank borrowed almost $20 billion in the first half of
the year from Federal Home Loan Banks, according to filings,
almost as much as it got from selling dollar-denominated bonds
in 2013. New York-based JPMorgan, with $2.4 trillion of assets,
obtained most of the loans from the Federal Home Loan Bank of
Cincinnati, whose 740 members typically resemble the $139
million-asset Bank of McCreary County in Kentucky and $40
million-asset Rural Cooperatives Credit Union.
Set up during the Great Depression to help community lenders, FHLBs raise cash by selling bonds viewed by rating companies and investors as backed by the U.S. government. Lending by the Congressionally chartered banks is climbing at the fastest pace since the start of the financial crisis in 2007. The growth has little to do with most of the 7,600 banks, thrifts, credit unions and insurers that are members. Without JPMorgan, Bank of America Corp. and Citigroup Inc., the three largest borrowers, lending by the FHLBs would be shrinking....
Set up during the Great Depression to help community lenders, FHLBs raise cash by selling bonds viewed by rating companies and investors as backed by the U.S. government. Lending by the Congressionally chartered banks is climbing at the fastest pace since the start of the financial crisis in 2007. The growth has little to do with most of the 7,600 banks, thrifts, credit unions and insurers that are members. Without JPMorgan, Bank of America Corp. and Citigroup Inc., the three largest borrowers, lending by the FHLBs would be shrinking....
